RealtyTrac debuted a new report outlining expected short sale trends in 2012 that was presented exclusively in a live broadcast produced by the Charfen Institute for
Certified Distressed Property Experts.
The RealtyTrac report shows a 33 percent year-over-year increase in pre-foreclosure sales, which are typically short sales, in January, with annual increases in 32 states, including Georgia (113 percent increase), Michigan (90 percent increase), California (52 percent increase), Texas (48 percent increase), Arizona (44 percent increase), Nevada (36 percent increase) and Florida (20 percent increase).
“Short sales have long held great promise as a market-based solution to the nation’s foreclosure problem, but short sales transactions over the past three years have actually declined after peaking in the first quarter of 2009,” said Daren Blomquist, vice president at RealtyTrac and author of the report. “January foreclosure sales numbers, along with first quarter foreclosure activity, strongly indicate that downward trend is ending, and we believe 2012 could be a record year for short sales.”
Short sales outnumbered REO sales in 12 states, including Utah, California, Arizona, Florida, Indiana, Colorado, New York and New Jersey.
“RealtyTrac’s data confirms the anecdotal evidence we’ve received from our network of nearly 40,000 CDPE-designated real estate agents,” said Alex Charfen, CEO of the Charfen Institute and co-host of the live broadcast with RealtyTrac Vice President Charlie Engel. “CDPEs across the country are telling us they’re helping more families this year than ever before avoid the indignity and financial devastation of a foreclosure by selling their property in a short sale.”
In addition to the growing numbers of short sales, the report shows other trends pointing to a housing market climate that is becoming more favorable to successful short sales. The average pre-foreclosure sales price in January was $174,120, down 4 percent from December and down 10 percent from January 2011 — evidence that lenders are starting to approve more aggressively priced short sales.
Efforts to streamline the often-lengthy short sale approval process appear to finally be paying off, with the average time to sell a pre-foreclosure property edging lower for the second consecutive quarter in the first quarter of 2012. The average time from when a property started the foreclosure process to when it sold as a pre-foreclosure was 306 days in the first quarter, down from 308 days in the fourth quarter of 2011 and down from a peak of 318 days in the third quarter of 2011.
Foreclosure starts in the first quarter of 2012 also point to more potential short sales for the remainder of the year. More than 100,000 properties nationwide started the foreclosure process in March, an increase of 7 percent from the previous month and the first time foreclosure starts had exceeded 100,000 since November 2011. March foreclosure starts were still down 11 percent from a year ago, but March was the third straight month where foreclosure starts increased from the previous month. And the trend is not just in a few states; 31 states posted monthly increases in foreclosure starts in March.
To view the broadcast, click here.